FY24 Trading Update

Virgin Wines UK plc (AIM: VINO), one of the UK's largest direct-to-consumer online wine retailers, is pleased to announce a trading update for the year ended 30 June 2024 (the "Period").

Revenue was in line with the prior year at £59m (FY23: £59m), while enhanced margins and operational efficiencies, particularly in warehouse fulfilment, drove an improvement in profitability.

EBITDA1 increased by 260% to £2.8m (FY23: £780k), with Profit/(Loss)1 before tax expected to be £1.95m (FY23: Loss £430k).

The balance sheet remains strong with net cash at the end of the Period significantly higher at £10.2m (FY23: £5.5m), driven by a strong bottom-line performance and improved inventory management. Gross cash including WineBank customer deposits totaled £18.3m (FY23: £13.5m) and the business remains debt free.

Despite an inflationary environment and ongoing cost pressures the Group increased its gross margins to 31.9% (FY23: 29.6%), driven by the Company's unique sourcing model and strong cost control.

New customer conversion rates on to the Group's subscription schemes increased materially to 55.5% (FY23: 49.2%) and, in a similarly positive vein, cancellation rates on the Company's flagship WineBank membership service improved to 16.1% (FY23: 17.3%).

Although customer acquisition has continued to be challenging, the rate of acquisition increased throughout Q4 whilst the Group maintained its disciplined approach, decreasing the fully costed cost per acquisition to £19.62 (FY23: £19.91).

The Company's new value proposition, Warehouse Wines, that launched pre-Christmas 2023, has started encouragingly with a particularly strong Q4, and an improving rate of customer acquisition. The business intends to make increased levels of investment in this key new initiative over FY25 and beyond.

Share Buyback Programme Update

Further to the Company's announcement on 30 May 2024 detailing a repurchase of shares and the launch of a share buyback programme (the "Programme"), a total of 310,735 ordinary shares in the Company have been repurchased. These shares are now held in treasury in anticipation of the future exercise of share options under the Company's long term incentive plan and the Company has now paused the Programme, with the timing of future potential repurchases remaining under active consideration.

1 EBITDA and Reported Profit/(Loss) before tax are stated before share based payments. FY24 figures remain subject to audit. FY23 comparatives are post FY23 exceptional costs.

Jay Wright, Chief Executive Officer at Virgin Wines, commented:

"I am pleased to report a full-year performance with resilient sales despite a challenging consumer and inflationary market backdrop. Both EBITDA and PBT were ahead of expectations, being significantly up year-on-year due to expanded gross margins and reduced operating variables.

Demand remains strong for our range of wines and subscription schemes. Our flagship WineBank service was recently recognised as 'Wine Club of the Year' at the prestigious International Wine Challenge awards, and over the past 12 months we have seen it deliver increased new customer conversion rates and decreased cancellation rates. Our B2B sales continue to grow while our newly launched value proposition, Warehouse Wines, has also delivered encouraging initial results.

We enter FY25 with the business performing well, and we remain confident for the future due to the strength of the underlying business model, our disciplined cost control and unique sourcing model."